>> right. jon: your job is taking a job out there, pomona right? >> cal state fullerton. jenna: good for you in california, bad for us now. we can't under state how much our crew means to us and i'm going to mean oscar, he's our camera. jon: we wish you all the best. who leaves on a tuesday, go figure. jenna: good point, jon. jon: thanks for joining us. jenna: "america live" starts right now. megyn: fox news alert on the stakes getting higher in an ugly showdown on capitol hill. former vice president dick cheney arriving moments ago to warn about the fallout from a fight that could raise taxes on every american and result in up to 2 million workers being laid off. welcome to "america live," everyone, i'm megyn kelly. republicans bringing in the big guns after democrats yesterday threatened to take the nation over a so-called fiscal cliff, allowing big tax hikes and massive defense budget cuts unless the g.o.p. agrees on a plan to raise taxes on those making over $250,000 a year.

all this on the same day fed reserve chair ben bernanke shared a new warning about the general state of our economy. >> the u.s. economy has continued to recover but economic activity appears to have decelerated somewhat during the first half of this year. after rising at an annual rate of 2.5% in the second half of 2011gdp decreased at a 2% rate in the first quarter of 2012 and available indicators point to a still smaller gain in the second quarter. jenna: chris stirewalt is our fox news digital politics editor and host of power play on fox news.com. so they kick the can, and they kick the can, and they kick the can a little further down the road, and here we are almost at end of the road and there is no additional room to kick it. >> reporter: that's about it size of it. really if you think about it megyn it represents decades of can kicking on a lot of issues as it relates to entitlements,

taxes, spending. both parties have had a pretty good time doing stop-gap things. well it's because we have a divided congress, because we have as we've talked about before the most conservative house since the 1930s and the most liberal president since the 1906s, nothing has been getting done, so the can has been getting dangerously close to the edge. on december 31st, everybody knows that barring action by this divided congress in a short lame-duck session after the election we're going to be in big, big trouble. jenna: so they set up this system because they couldn't make meaningful agreements that was absurd. let's make absurd budget cuts that we will never implement. we are not going to layoff 2 million defense workers, that would be like crazy things like dick cheney coming back to capitol hill to try to yell at everybody, and yes, it doesn't seem so absurd, suddenly because you've got top democrats coming out yesterday and saying, it's going to happen, fiscal cliff here we come unless the g.o.p. a

grows to hike taxes. >> reporter: on all those people and remember it's $200,000, it's 250 for the household, 200 for individuals. patti murray and other democrats, she runs their re-election team for the senate, and they say, we would rather have taxes go up for everybody in the country. here we are talking about maybe more than $200 billion in new taxes for everybody in the country, or all taxpayers in the countries if republicans don't agree to have the taxes just go up for top earners. the rhetoric is ratcheting up over and over again and now the republicans are pushing hard on defense matters. dick cheney may not be the most popular politician in america today but he has a lot of clout when it comes to defense issues, he's a former secretary of defense, the republicans are going to be push ing on this in a big way. jenna: it seems everyone is agreeing except the people who have the power that you can't

have this situation where all the tax hikes kick in at end of the year and all these folks lose their jobs and all this cutting is tkaopb at th done at the pentagon. and we know that our lawmakers, with some exceptions have no courage. what does it mean as a practical matter. >> reporter: whatever team wins in november is going to have a chance to set a lot of policy come january, because the can will probably be kicked one more time in that lame-duck session, they'll probably just patch these things, a couple months, so that the next congress, and whoever gets sworn in as president on january 20th, but the real significance and i think we shouldn't lose sight of this is that every voter in america is going to watch this dreadful drama play out over -- between now and election day and have plenty of good reason to be disgusted with the status quo in washington, and plenty of good reason to believe that they are the ones who have been the victims in this game of chicken. jenna: you know it reminds me of the time that i wanted to lose a few pounds so i decided to go on an all fish diet, and i hate fish and i just thought i

definitely won't eat very much at all because i eat fish. you know what i was doing? i was dooming myself to failure, chris stirewalt, and that's exactly what happened. >> reporter: sometimes that's exactly what happens. any incumbent has reason to be concerned about this all-fish diet because voters are going to look at this and say how badly, how badly the political establishment has failed them as they see this sword hanging over their heads because these are among the 2 million that would lose the jobs and among the millions of taxpayers that would pay those hundreds of billions of dollars more in taxes. jenna: they will have the same look on their faces as i did when i tried to bite into that sea bass. chris stirewalt thank you. >> reporter: you bet. jenna: as democrats threaten to let the u.s. go off the so-called fiscal cliff mitch mcconnell says their motivation is something much different than a tax debate. >> make no mistake, what the democrats are proposing today is an entirely avoidable high

stakes game of chicken. with the single minded goal of taking more money from those to earn it for government to waste. with the rest of us seeing the worst economic recovery in modern times, democrats use another opportunity to use a crisis to grow the government, and that's what they are focused on. jenna: if he's right, is this really a strategy? then the question is is it a good one for the democrats to threaten across the board tax hikes and major layoffs? a fair & balanced debate coming up later. another alert now from capitol hill, this time on a money laundering scandal involving one of the world's largest banks. hsbc announcing in the last hour that it is now in the process of closing thousands of accounts in the caymen islands, just one of several places the bank allegedly allowed dirty funds to be laundered.

hsbc executive david bagley resigning from his post after a senate hearing into the scandal earlier today, acknowledging that the bank failed to launder eights anti anti-laundering programs. money was allowed to be moved in and out, thus laundered, possibly funding terrorism and fueling drug cartels all over the world. a live report explaining all of this just ahead. we are also tracking a developing story involving reported food tampering, that is putting it mildly aboard some delta airline flights. at least one passenger is being treated for a possible, they are looking into -- possible hiv infection after several people reported biting into a dangerous surprise inside of their inch-flight meals. trace gallagher has more from the breaking news desk. >> reporter: sewing needles, megyn. these needles were found in

turkey sandwiches given to business class passengers, as well as the flight crew and federal employ lease because an air marshal is one of those that found a needle inside his turkey sandwich. now the slights all originated in amsterdam to the united states. one was bound to minneapolis, one to seattle and two of them to atlanta. all of the stand witches were made by gate gourmet and made at their facility in amsterdam. here is the bizarre thing, you have six sandwiches, right, on four different flights, two of those sandwiches were given to a father and son on different flights. listen. >> i thought it was a bone, and it stuck me in my tongue and i pulled it out, and it was a needle, about an inch long. my son had a similar incident in which he was about to bite down into the sandwich, found something shiny in the sandwich east was about to bite he pulled out a needle from the sandwich

and brought that to the attention of the stewardess on their flight to atlanta. >> reporter: we tried to contact the d in surgery, not getting hit he's performing surgery. the turkey sandwiches have all been pulled. the tsa began notifying other u.s. flights from amsterdam about their catering services. the police were asked if this company was actually having grievances with employees and they wouldn't comment on that, but delta issued a statement saying and i'm quoting here, delta has taken immediate action with our inch-flight caterer in amsterdam to insure the safety and quality of the food we provide on board our aircraft. again this was just delta, but this company also does catering for other u.s. flights coming out of amsterdam as well. jenna: unbelievable story. very disconcerting, trace thank you. >> reporter: okay. jenna: fox news alert we just got word that police in alabama now have a suspect in custody after some 16 people were shot last night.

the gunman opening fire on a crowd of some 80 to 90 people. our reporter is talking with the police right now. we'll go live to the scene in three minutes. and up next the obama campaign has run more than 37,000tv ads mostly in the battleground states, 90-plus percent of which attack governor mitt romney. what happened to the president's 2008 complaints about negative campaigning? >> that's why he's spending these last weeks calling me every name in the book. because that's how you play the game in washington. if you can't beat your opponent's ideas, you distort those ideas and maybe make some up. jenna: michael reagan joins us right after this break to discuss what exactly happened to the president's 2008 pledge not to demonize his opponent, and whether his new strategy is going to work. and the uproar over the president's comments on business people, small businesses and their debt to the government.

we'll have a special focus group on whether this perspective holds water, and what it could mean for our country and a possible second term. >> the irony of this actual comment is that if you do actually play the full clip and watch it in full context it's much worse than just the little clip that we heard. the reality is this reveals a world view of this president, that all good emanates from government, not the individual, not the private sector which is a very dangerous place to be i think in this political climate. car insurance? no problem. you want to save money on rv insurance? no problem. you want to save money on motorcycle insurance? no problem. you want to find a place to park all these things? fuggedaboud it. this is new york. hey little guy, wake up! aw, come off it mate! geico. saving people money on more than just car insurance.

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>> these negative ads, negative attacks spending all this time talking about me instead of talking about what he's going to do, that is not going to lower your gas prices. it doesn't do a single thing to help the american people. it's politics as a game. we don't need the slash and burn say anything, do anything politics that divides and

distracts, that tears us apart instead of bring us together. because if you don't have any fresh ideas, then you use stale tactics to scare voters. [cheering] >> if you don't have a record to run on, then you paint your opponent as someone that people should run from. that's why he's spending these last weeks calling me every name in the book, because that's how you play the game in washington. if you can't beat your opponent's ideas you distort those ideas and maybe make some up. jenna: those are remarks from then candidate obama four years ago suggesting it was not his style or desire in anyway to demon ice his opponent on the campaign trial. he promised a different kind of campaign and different kind of presidency. fast forward to 2012 and the numbers show that the campaign season is becoming even more negative, perhaps than ever before. according to our latest research the obama campaign has run more

than 37,000 ads in the past weeks in the battleground states, 97% of which are devoted to attacking governor mitt romney. political consultant michael reagan is chairman of the reagan group and with me now. michael, they are beautiful sentiments when you hear what barack obama was take on the campaign trail back in 2008. it is that kind of attitude and positivity and up lifting devotion to a debate about the issue that buoyed him into office by a lot of voters, caused them to get behind him when they might not otherwise have done so. it seems clear from the ads he has not lived up to that, his opponent has not lived up to that. and we find ourselves in a season that is what, as negative as it's ever got even. >> he used the statements back in 2008 and brought the country together, united the country together. but then the policies that he put forward were disastrous, and they are still disastrous. so now he's in a position not able to defend his policies that

he's brought forward in washington d.c., and so now he's on the attack, attacking mitt romney and the republicans as if it's their fault his policies are not working much. o working. of course this is wait he's going to play the game all the way through because he has no policies to foe forward that will work for the american public and put them back to work. jenna: what happened sth do you believe he said those words when he said them? i think he seemed sincere to most folks at the time, the folks who got behind him, and yet it's so very different this time around. >> but he had no depth. he had no depth of belief in the united states of america, no depth of belief in the free enterprise system. no depth of belief in corporate america and the creation of jobs. his only depth in belief was the government whether it's the state government or federal government, you know, taking care of everything america in

fact needs and that's what he brought to washington. he talked about change but he never defined change and it brought people together waiting for change. well, now they've seen the change, the change is people are out of work, the country is in a free fall, people aren't going ck to work, and they are hoping now for change in the next election. he's trying to sell the same thing he sold in 2008, but doing it by demonizing mitt romney. what mitt romney needs to do is stay on message of hope. he needs to be that candidate of 2008 or ronald reagan from 1980. jenna: you are criticizing barack obama's policies and it's no surprise to our viewers that you're not a fan of him. but what do you think happened -- where is that man who was talking about how he wouldn't demonize his opponent, how he was going to stay positive, about how the big ideas are what matter when you don't have any that's when you go to the politics of personal destruction? >> well that man has policies that absolutely failed, and so he doesn't want to talk about

those policies, they have absolutely failed. when you put two budgets together, give them to the congress of the united states and they've gone down twaoeuz 499 to zero you have real problems in washington d.c. my father taught me as his tpauts taugh father taught him, when they start paying you to not work why work. people are being paid not to work. they are not going to work and looking for jobs. he can't stand back and say, look at my policies i put america back to work. he has to do exactly what he was saying john mccain was doing in 2008, attack his opponent. i mean to the point where he has his people out that, surrogates calling mitt romney a felon? i mean mitt romney needs to stay on message, what he needs to do is not get off message, and what barack obama is trying to do is change the message to make mitt romney defend being successful. jenna: james car very well went on hannity last night in a

fascinating interview. you should check it out online if you haven't seen it to the viewers. he said he saw these clips and they had a similar discussion and he said, hooray, chicago, good job, in terms of the negativity of the attacks and bringing this down to a street fight. an said look, politics has always been ugly. he talked about when his former boss bill clinton was running for office how some folks were a cushion him of murder and said, you know, sort of welcome to the game, this is what happens, and kind of said, look, the promises were what the promises were but politics is ugly. that's the world in which we live in. >> megyn, reality so many things never change, i remember back in 1960 my dad ran for governor and governor brown took out an ad and in the ad he was talking to a young black child, 12, 13 years of age and explaining to him he was running for a third time as governor. the black child said, well who you running against? governor brown says well i'm running against an actor. you know it was an actor that shot abe lincoln. and everybody was appalled. the media was appalled. the people of california were

appalled. my father was behind in the polls and within 72 hours he went from being behind in the polls to being ahead and never looked back because people of america would aeu pauld that somebody would even takeout an ad like that. today you could run that ad in america and people would say, it was an actor that shot abe lincoln, what is the problem with that ad? that's how america has changed, it's not that politics has changed, america has changed and america now accepts negative ads, accepts the street fight and then we sit back and say, well how come nothing is getting done? until we as americans say, the hell with this. i'm mad as hell, i'm not going to take it any more it will stay in that system. jenna: michael reagan, always great to get your perspective. thank you, sir. >> thank you. jenna: police and volunteers are back out in iowa look for two young girls whose bicycles were found near a lake last friday. a live report and a homicide investigator just ahead with the disturbing new questions in this case. the pentagon is bulking up our defenses in the persian gulf

after a navy ship opened fire on a small boat yesterday but what is the risk if iran responds here? we'll tell you what they are saying. are we ready? a live report coming up. uh, i'm in a timeout because apparently riding the dog like it's a small horse is frowned upon in this establishment! luckily though, ya know, i conceal this bad boy underneath my blanket just so i can get on e-trade. check my investment portfolio, research stocks... wait, why are you taking... oh, i see...solitary. just a man and his thoughts.

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jenna: governor mitt romney getting ready to take the stage at a campaign stop in the battleground state of pennsylvania, hoerpl to horizontal wire line services, a leading proponent of gas well drilling. governor romney expected to use the company as a backdrop for his speech on energy and job creation. remarks are streaming live right now on foxnews.com if you care to watch them. at the top of the hour president obama will make remarks at a fund-raiser in texas. we are told he's going to start doing more of these speaking events without his

teleprompter. senior campaign officials say it is all part of their plan to, quote, up the tempo at campaign events. in the past critics have often mocked the president's use of the tell louisiana prompter, used even in speeches to school children. president obama making a change on the campaign trail. during recent campaign events the president was seen addressing hundreds of people -- wait a minute. this isn't the right script or the right story. standby. why would we be alerting that? where are we going, control room? sometimes we all find out together. tuscaloosa. right now police down in tuscaloosa, alabama, they are making the announcement that we have been awaitin waiting for. the suspect they believe opened fire in a crowded bar they believe is now in custody. we have been covering the story. elizabeth is there right now with the latest. >> reporter: that manhunt is

over nearly 12 hours after it began, but witnesses say not before it was a very bloody and chaotic scene here at the copper top bar. to give you a visual exactly writ happened the man was stand baggy 15 yards from where we are now. he approached the bar with an a stault-styl assault-style weapon. some people were crawling and he continued shooting. we went to a press conference earlier in the day where police told us he was targeting one individual in the bar they believe. here is what he told us. >> the reason we believe it was not random act of violence is because when he first walked up and there were people out there on the sidewalk and he stood for several minutes watching and observing before ever firing a single shot. >> reporter: megyn, 17 people were rushed to the hospital, the police saying 11 were hit by bullets, others were injured by flying debris and obviously a mad rush to get outside of the bar. five people remain in the hospital, two of them in icu.

obviously the breaking news is that the alleged shooter is in custody, and we will know more about him at a scheduled press conference 2 block pm eastern time and of course bring you the details. megyn. jenna: thank you. there are new questions today on what really happened in the bizarre deaths of a 6-year-old boy and his father's girlfriend. the little boy was the son of a wealthy pharmaceutical executive. he was said to have fallen down a flight of stairs and later died from his injuries. well just days later his father's girlfriend, who was the only person home at the time of the boy's fall was found dead in the same home in some bizarre circumstances. everything was ruled accidental until now. we'll show you why there is now a new call for a new investigation. and the president's comments on the role of big government in small businesses sparked a title wave of controversy, saying if you built a small business and made it a big success you didn't

build that. today our focus group debates the ongoing controversy. >> i am upset because i know how hard i've been working, i mean working ten years without a vacation, around-the-clock, i've sacrificed my relationships, with spouses, kids, everything, i speak for all small business people, it's krarpbgs it' crap. it's the you will math insult that the president has to dig this low and it's ridiculous. [ male announcer ] don't miss red lobster's four course seafood feast,

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megyn: back to our top story today. dick cheney is meeting with leaders on capitol hill. allover a tax debate is being compared to a high-stakes game of chicken with u.s. economy on the line. millions of american jobs are at risk right now, if sequestration takes effect at the end of the year, it is basically a fancy way of saying if you don't get a deal struck on taxes among other things, they're going to be major cuts in spending, and that includes defense spending and that is one of the reasons why dick cheney came to capitol hill, to try to urge folks to see reason on those cuts. the democrats say they do not get the compromise they are looking for on some of these bush era tax cuts, they want to hike the taxes on those making over 200,000 if you are an

individual or 250,000 of you are a family. they say that they don't get their way, well, they are previewing their plan of attack. >> we can't get a good deal, a balanced deal that calls on the wealthy, then i will absolutely call for reform. if the bush tax cuts expire, every proposal will be a tax cut proposal and the pledge will no longer keep democrats and republicans able to compromise. if americans start seeing this money come out of their paychecks next yearyear, are republicans really going to stand up and fight for the rich? megyn: patty murray explaining her willingness to let a variety of automatic spending cuts and tax hikes take effect. senate minority leader mitch mcconnell, on the opposite side

of the aisle says that the democrats are pursuing more than a tax planner. >> the democrats, what they are proposing today, is an entirely avoidable high-stakes game of chicken. this economic recovery in modern times, democrats see another opportunity for a crisis to grow the government, and that is what they are focused on okay. megyn: there is some sort of technical problem with their studios, but they were going to go to trace gallagher, there is some sort of problem with his studio as well. this is an exciting show. did you ever see train wreck tv? welcome. also ahead, more interesting stuff. don't go away. we will be right back. i think.

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megyn: a fox news alert. high tension on the high seas of the middle east. the pentagon ramping up military presence. what could precipitate a rapid escalation of the showdown with iran. for more on this we are joined by general jack keane. he is a fox news military analyst. i'll come back to the program, general. what is going on in the persian gulf? >> clearly come the united states is building up defensive forces as a deterrent. they want the iranians to know to not even think about doing something as a result of the economic sanctions, which are starting to have some impact. this is prevention and i think there is something excellent that we are doing. the additional ships,.

megyn: we talked about that last week, what is this protective shield? how will it help us? >> the iranians have a significant missile capability. they are the ballistic missiles that can range beyond israel. what this does is pick pics of the missile almost at launch time and gives us the opportunity to knock down a missile. megyn: are we just getting around to that now a matter. >> know, what we are doing is adding some in other countries. we have had it in turkey and israel and now we have put it in the capability of the ships. most of the missiles are going to come from the ships. this is a radar that will detect the loss of an iranian missile. megyn: what about what happened yesterday with this vote that we shot out, now they say it was a fishing vote off of the of the uae. our navy beau took it out and it was speeding towards it without stopping at a rapid rate. there was speculation that it could be up to no good. this is what happened with the uss cole, so we have to be

careful. does not have broader implications. the suggestions were that iran would be watching such a thing and draw conclusions of its own. >> i don't think so. the iranians are playing cat and mouse with airships for years. they know what our rules of engagement are and how we have changed those rules of engagement. they mostly done to harass us. for whatever reason committee did not respond to all of the alert means that we provided them. it is a horrible incident with innocent people caught up in this situation is much larger. but i don't think that militarily anything will rise from it. megyn: does it speak to rising concerns on our part we met were we too quick to fire, or did we do it we should have done? >> no, i would not second gas guys on the ship. they had no idea what the intent of that vessel is other than the fact that it was coming right at

them. if they don't see any weapons come in that's beside the point, because it could have explosives on it. megyn: around hold that the talks could pave the way for resolution a resolution of some sort. there is a july for meaning, and helga schmidt, the deputy of the eu foreign policy chief, she's going to get together with a guy named ali bageri. and it will come down to those two about iran and the nuclear program. >> it is all part of a ploy to buy time for them. they know that we want to negotiate a solution. they know the international community wants to. they played it up and they plan to appear. they may even make a slight concession that we would probably have difficulty verifying. because they would keep our

inspectors away. that buys them time. this is than the behavior for some time. their strategic objectives, make no mistake, is to have a nuclear capability, that guarantees the preservation of the regime there they are totally focused on not despite all of the other things going on around them. megyn: what happens if iran winds up with a nuclear weapon. let's say that they wind up with a nuclear weapon. and the sanctions have effect. and we keep upping the sanctions bit by bit and europe does the same, and the regime change happens in iran. but we wind up with someone crazier over there in charge than we already have? >> and it's certainly a possibility, but it's hard to imagine anybody more radical than the regime that is running iran right now. they are the most radical in the world. they are fully intent on achieving regional domination. they want a nuclear weapon to help them guarantee that. they want to exploit the islamic revolution and they are influencing every country in the region in some form or fashion.

they are clearly a rogue state and every form of the word. they are so repressive on their own people. certainly not a people -- enough fuel. no military involvement whatsoever. we would get someone else to work with. you have to make the assumption that whatever took over would be better than what is sitting there now. megyn: short of regime change, we are looking at iran moving closer to having a nuke. israel said months ago, and became public that they were looking at a possible strike on the nuclear facilities. maybe past spring into summer, here we are moving into the end of july. we have been trying to negotiate. the negotiations aren't going anywhere. is israel now have it back up against the wall to some extent? want to say they are to do it, but once that is out there -- if they don't do anything, is there increased pressure on them somehow to follow through in some way? >> first of all, the israelis do not want to do a military

attack. they would do if the iranians did not give up their nuclear capabilities. they understand the ramifications of it and the potential leading to war and also the iranians, giving them a high ground as a result of the israelis conducting an unprovoked attack. we are moving closer to those nuclear capabilities -- secretary clinton's visit was to provide assurances that we will stick with tough sanctions and hopefully diplomatic breakthrough. hopefully we can buy time with the israelis and give them reassurance is so they can be listen, the israelis -- this is an existential threat to them. they are looking closely at what happened, and they are also, i believe, among themselves questioning our motivations a little bit because they know that we do not want any destabilizing situation in that part of the world prior to the u.s. elections. and they know that u.s. elections are a factor in the motivator for the menstruation. all that said, the israelis have

that on the table. the time starts to run out, they would exercise that option. megyn: general keane, it is always fascinating to talk to you. coming up, and an eagle eyed bus driver goes beyond the call of duty and saves the life of someone in the process. we will tell you what he did when he saw a toddler climb out of a third story window. we will show you what happened next and why it is one of the most amazing things you'll see all day. and the uproar over president obama's comment on american businesses and their debt to the government. we will have a special focus group on whether this perspective could be a problem for the president in his reelection efforts, and whether this is a game changer in his presidential race. >> this statement, i truly believe is what he revealed as collectivist preference, i do logically, i think it is going to reveal his content for capitalism, small business and the men and women who make this country work to create 70% of the jobs.

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megyn: you are looking at live pictures out of san antonio, where president obama is making what could be his last fundraising trip before november. the fundraiser at the city's convention center could reportedly be the biggest for a democrat in the history of that city. you can watch it live on our website if you care to. fox news.com. massive undertaking in iowa right now in the search for two missing girls. investigators there now and training a lake near site where two bicycles were found.

belonging to eight-year-old elizabeth collins and her 10 year old cousin leo morrissey. they combed the neighborhoods near the girl's homes and struggled to come up with leads. steve has an update from chicago. reporter: yes, the best leads are the ones that they discovered on friday. that would be the two bicycles in the purse belonging to these two missing cousins. they are draining the lake as they speak. day two of the process, which is expected to take about three days. police say they are doing this to make 100% sure that there was nothing related to this case at the bottom of this lake or, in the worst case, that a body has been sitting at the bottom of the link read police in the area of evansville, iowa, said the checkpoints being checked with cars, taking down license plate numbers, even some older vehicle operators, asking them to open

up their trunks. this whole ordeal, the cousins now missing for four days, is wearing on their parents. >> i've gone over everything a thousand times in my mind. it's impossible. were just trying to hold on to whatever kind of hope you have. reporter: his last time seeing his daughter was when he saw in a white t-shirt and shorts and black sneakers. she's about 4-foot tall. her cousin is about a foot taller. 5-foot tall, last seen wearing a light green top and shorts, along with flip-flops. again, police saying that they really don't have any leads and not. there have been reports that fbi dogs did follow a scent believed to be the two girls '. they will report back with anymore on that. megyn: for more on the search, we bring in rod wheeler.

welcome to the program. we have two bikes found, a first down, to girls gone and let me start with this. why haven't the police issued an amber alert? >> well, you know, megyn, that's a question that a lot of people have. the reason they have not done so is because the rules for issuing an amber alert is very clear. they have not exactly been following interpreted in other words, you don't have a person to attribute the missing girl to come in a vehicle that we could be on the lookout for. those are two specific rules that have to be in place in order for the amber alert to be issued. that is the reason why the police have not issued an amber alert. not only that, we are not exactly sure that the little girls were abducted. the police are not saying for sure that they were abducted. they could be missing at this point. megyn: that is the thing. that would be -- what would you do when you hear that an 8-year-old and a 10 year old are both missing? is that more indicative of abduction or two girls that got lost or decided, you know, to

run away from home? reporter: that is an excellent question. it could be any of the above. let me just tell you that this is exactly what the police are doing now, and the way in which we conduct these investigations -- there have been no apparent signs of foul play. they looked everywhere. they have interviewed a number of relatives associated with a little girls, they have also checked the national sex offender registry and they are he interviewed, including reinterview, one of the registered sex offenders in that area. they are not necessarily ruling those people out, but at the same time, they are not exactly pulling them in. the other thing that they are doing, and this is the way the do these investigations, you start at the place in which you last down any evidence at all. in this case, it was the little girl's bicycle and the purse. after many years and investigating a missing person, these liberals may be in the area, possibly in the lake,

although they have checked the lake and they are in the process of draining it now. megyn: doctor good they are and not lake. but they would likely be the victims of foul play? in your experience, how unusual would be torn abductor to manage the two young girls under his power? reporter: we are talking about two little girls eight years old in 10 years old. i would not be too difficult to do. this is very significant in terms of the investigation. i heard the sheriff make a statement that the area around where the bicycles and purse were found, there was no apparent sign of a struggle or something like that. you know, we looked specifically for that. they haven't found any of that at this point. the only other thing that is a little peculiar is that several family members have made the statement that they believe that the little girls were abducted and as an investigator, i have to say say to myself, why do you believe that? that has not been set yet.

obviously come the police are going to look into that as well. they continue to focus on that lake and area around the park, i think they will come across more evidence. megyn: i don't know if it were abducted, if the man or person had a weapon, if he was easily to get the girls under control. they did say that the sex offender interviews have not led to new information. we shall see. thank you so much. coming up, we have seen repeated attacks from the president against governor romney and bain capital. why is the president so invested in this? when democratic advisers publicly warned them not to go there. we will have a talk about it in the next hour. and a grieving mother speaking out after the death of her little boy a year later. and the alleged suicide of his father's girlfriend who was watching him when he died. why the mother is now questioning this entire investigation and demanding that the case be reopened. i got mine in iraq, 2003.

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megyn: a fox news alert on a briefing wrapping up at the pentagon is tensions grow in the persian gulf after a u.s. navy ship opened fire to head off what they thought was an attack. we are here at "america live", i amegyn kelly. warships and more weapons and more defense systems. there is growing concern about what iran might do in response. it was just a little more than 24 hours ago when a motorboat approached, ignoring warnings to move away, forcing the ship to fire. the briefing just wrapped up, and jennifer griffin was there. she joins us live now. reporter: we now know more about the shooting incident involving the persian gulf yesterday. the victims were four indian fishermen. one was killed, three other survivors are in a dubai hospital. according to the indian ambassador to the united arab

emirates, they say that the survivors are saying that no warning was given for the u.s. navy ship fired with its 50 caliber machine caliber machine gun. this cannot come in a worse time for the united states, given a chance to warm relations with india come as part of its new broader asia strategy. george lytle denied that no warning was given to this speedboat, but would not say whether weapons were found or whether the u.s. would apologize. >> we certainly regret the loss of life. there were in fact, measures that were taken this is under investigation, and we will talk about the full facts once the investigation is complete. reporter: it is extremely rare for u.s. shooting incident to be involved in the persian gulf. u.s. oil tanker headed towards

the main dubai port, iranian officials criticized the shooting incident coming to using the u.s. destabilizing the gulf. the pentagon announced today an unprecedented international de- mining exercise, that will take place not far from the strait of hormuz in september. it will involve 20 nations, four different locations, the united states will participate this video shows iranian mind training back in 2006. >> this is an exercise at ending a message to iran. this is an exercise that is designed, within this multinational forum, to increase capabilities and cooperation. reporter: the recent shooting incident involving u.s. navy, which relies heavily on bases in the gulf, could complicate relations with the united arab emirates and a missile defense

unit aimed at monitoring iranian missiles. megyn: here is a look at what our present looks like. there are at least six ships in each group, including the aircraft carrier. there is one amphibious assault ship, capable of supporting him from landing. the number of minesweepers in the gulf has been doubled to eight, and there are 16,000 troops stationed on the ground in kuwait. back now to our breaking news from last hour about one of the world's largest banks. in the middle of a big money laundering scandal. a top executive with the bank hsbc announced he is stepping down, in the middle of accusations that the bank helped iran inveighed international sanctions and laundered money for terrorists and drug cartels. the bank also announcing it is closing thousands of accounts in the cayman islands. catherine herridge is live with more.

reporter: senior executives of hsbc testified under oath this morning before the senate subcommittee on investigations. one executive resigning and apologizing for bad practices that expose the u.s. financial system. >> i have said before and i will say again, despite the best efforts and intentions of many dedicated professionals, hsbc has fallen short of our expectations and the expectations of our regulators. reporter: right now we are waiting for the hearing to begin. an hour of testimony. earlier, lawmakers pressed mrs. on money laundering by the affiliates. the senior invested with homeland security explaining why criminal syndicates would move just about system. >> their profits fuel activity. the more legitimate money they appear to have, the more they can fuel their illicit activity and then diversified their criminal activity.

cormac at the heart of this senate investigation, dozens of e-mails that show a pattern of coaching iranian banks of how to avoid scrutiny between 2001 and 2007. those transactions were worth $19 million. in this exchange from a former bank executive sent to the u.s. office that they were not behind it. >> europe helped coach these banks to send payments to the u.s. without slowing down. it was a memo that describes some opportunities that they saw progress and business generally, but hsbc was not driving that decision. reporter: the criminal case against hsbc, a spokeswoman telling fox that she could not comment on an ongoing investigation. can read between the lines there. megyn: they do so much. >> you are welcome. megyn: tracking new developments from california in a case that made headlines last year involving two deaths just days apart. the first victim was six-year-old max shacknai.

the family telling police that the little boy fell down a staircase inside his father's home. police later ruled that max shacknai's death was a horrible accident. a little boy's father, joe not come as a million or pharmaceutical executive. two days after his son's death, the father's girlfriend, rebecca, was found hanging from the balcony of the historic mansion on coronado island. that is in san diego. today, max shacknai's mother is speaking out. saying there is much more to this story and vowing to get what she believes is the real truth behind her son's death. trace gallagher is live with more. reporter: even early on in this investigation, there were reports surfacing that doctors believe that max shacknai's injuries were not consistently falling down a staircase. police clearly did not buy into

that. now, the boy's mom says that she has assembled a team of experts who do not believe that her son's death was an accident. here is his mom. >> i think even today, it is still my job as a mother to find out what happened exactly to him. and to continue that until i find an answer. reporter: now, remember that max was being watched at the time by his father's girlfriend, as you said, 32-year-old rebecca. she said she was in the bathroom and then found the boy at the bottom of the staircase at the historic mansion in coronado. two days later, rebecca was found hanging off the balcony, her hands were bound behind her back, her feet were also bound. they ruled her death a suicide and her family to this day does not believe that, and now dina

shacknai leaves her son's death was suspicious. here is her attorney. >> this morning, we formally requested that the coronado police department meet with us at their offices so we can share with them our findings and conclusions. reporter: we just spoke to the coronado police come and they say they are willing to meet with the family saying if it is a psychic telling us what they think will happen, we will just have to evaluate their evidence objectively and make a decision from there. they hope to meet very soon to lay out their evidence. megyn: trace gallagher, thank you so much. we will have much more on this mother's fight to get police to reopen the case of their son's death on the docket in today's "kelly's court." for weeks the president's campaign team has been ramping up attacks on governor romney is time at bain capital. this despite calls from some of the president's top surrogates. his surrogates to stay away from this line of attack. remember newark mayor cory

booker calling the attacks nauseating? is the president choosing to ignore those warnings, and why? we will debate it right after this break. there is new fallout over the president's comments over business owners and the debt that they owe to their government. our focus group has a full throttle debate st ahead. >> we hired three of for every new workers in the country, and to say that we are not putting in the blood, sweat, tears to build our business, it is just an insult a party?

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>> from a personal level, i am not about the human side of private equity. we are getting to a ridiculous point in america. if you look at bain capital's record, they have done a lot to support businesses and growing businesses, i am very uncomfortable with this. >> i would not have backed off

if i were mayor booker. i agree with the core of the comments on "meet the press", but i would not have backed it up. >> there is no question the terms of getting up and going to the office, you know, basically performing the essential functions in the office, a man who has been governor and had a stellar business career, possesses the qualification threshold. megyn: three high-profile democrats making news in the last three weeks with warnings to the president, some of which you heard there. explicitly to back off of that campaign attacks on governor raimi-- governor romney is time at bain capital. raising questions about why the president's team is so invested in this particular issue. turning now to a fox news contributor to discuss it with me. he served for jimmie carter. gentlemen, welcome. you hear those top democrats.

cory booker tried to dial it back. you heard about this scene emerging and it wasn't just those three. telling barack obama tube back off of the attacks on bain capital. the company did some good. yet the president came out fighting back then, saying that i want this line of attack and has continued it, beating that drum ever since. let me start with you on this. why? >> what they want to do is that the president's campaign is desperate to define mitt romney in a fashion that makes him unacceptable to voters. not so much -- i don't think they can make him unqualified as they can make them unacceptable. this is the period him and i have said this for years, this is the period in the early summer, where the challenge tends to be where the definition is set in stone. romney has done nothing in that picture. he is a mere shadow to voters

and has left himself vulnerable of this. the white house is desperate to make that case. the romney campaign is basically running one positive on their super -- super pac or they need to fill in the picture about bain capital. there is a story to tell. some democrats are upset because they think it's the wrong attack, but they are not on the ballot. right now, chicago desperately wants to win, and they think that they have and they do have mitt romney on the run. megyn: frank? >> this was 2004. remember come you had a democratic candidate from a moderate centrist from massachusetts. his strength was in the military and republicans of independent expenditures, what did they do? it worked. they got mitt romney, his drink is business. the obama campaign is going after him over the one thing that qualifies him to be president. i agree with pat that it is working. i will make one point.

if you can't and bain capital -- this is news from college and afterwards -- bain capital is one the most speck of firms of its type. you will not find people in the business world criticizing them. they do their job well. if you don't accept that, it makes you wonder what the president stands on the issues of economic freedom and whether there is any group of wall street but he did say something positive about. >> is a this is a problem for romney not telling his own story. i believe that it has been presented -- i don't really care when he was there or not, i just think that that is all smoke and mirrors -- blue smoke. but the issue of what he did at bain capital, is he a man who is in the business of a dealmaker? or is he a job creator? he needs to tell that story. he also needs, as frank just said, the contrast is the president's model is clear. business will survive only with government. we heard that the other day.

when you're not raising money of $40,000 a plate, when you're going to wall street, what you do is -- and romney needs to make a case. he is trying to do in the last few days. there is a model. you invest, some. you invest, something's work and some things don't. that is the new global economy. the president's model of solyndra and other green energy, give money to chosen projects. they fail or not. the money goes to his contributors. megyn: you are in the business of advising folks when called upon to do so, and messaging. so the romney campaign calls you and says this is supposed to be a strength, how is it getting turned into weakness, and what should we do, what are your thoughts? >> first, we have asked the rhetorical questions. which is why is the president of focus on his opponent when he doesn't explain his own record. when why do we still have unemployment over 8%. when we have record deficits and the debt has gone up more under

your administration a than it has under the first 40 presidents combined. wide, wide, wide. the most simple question is one of 5-year-old asks. this demonstration is not focused on it. either the other part is that romney has to show some passion in terms of job creation. this is a genuine problem solver. the study of who he is and what he is done, i think independent voters would let him. he is not as a logical as frustrated conservatives. he is a problem solver and that is what they are looking for. how does a problem solver create jobs come and fix the economy coming to the budget deficit under control. >> that was part of the story i suggest he should have told. how bain capital worked. the success story where they helped create a new future and get a good idea. the same thing with you with excellent problem solving. i now gather that they will probably do something during the olympics. what a metaphor. megyn: i have to run, but what do you make of these calls for

mitt romney to dump his messaging team and move on to somebody who might better advice than? >> that is a process that is not effective. it is legitimate to challenge the campaign, but what observers, particularly those who want mitt romney to be successful -- they should focus on the record of the obama administration and not focusing on the messaging of mitt romney. >> he needs some help, too. some can help them out rather than sitting on the sidelines. democrats have a message machine that is disciplined across the party. republicans don't. megyn: always interesting. thank you so much. coming up, a sharp eyed new york city bus driver uses his intelligence to help each other following onto the street. there are a growing number of small business owners sharing frustrations over the president's suggestion that it wasn't as their sweat and hard work that got them where they were. but the government deserves a huge share of the credit. our focus group takes up the complaints from folks like

charles payne just ahead. >> i am upset because i know how hard i have been working. i've been working 10 years. i sacrificed my relationships, i sacrificed spouses, kids, everything. i speak for all small business people. it is crap and the ultimate insult to the president had to dig this low in its ridiculousness ets use magnesiu an ingredient that rks more naturally with your colon than stulant laxatives, for effective relie of constation without cramps. thanks. good morning, students. today we're gonna continue... or annuity over 10 or even 20 years? call imperial structured settlements. the experts at imperial can convert your long-term payout into a lump sum of cash today.

megyn: an eagle eyed bus driver in the big apple being hailed as a hero after a quick reaction to help save a little girl's life. if you watch this incredible video of his superman antics come you will see that calling him a hero may be an understatement. trace gallagher has the news. reporter: this guy is great.

his name is steven st. bernard. he was walking from his job as a bus driver. he was near coney island, heard a bunch of commotion, he looked up and saw this little girl, 6-year-old girl. standing on top of the air-conditioning unit. she had apparently crawled out. you know that according kind of protection in the window -- she called out and by the time he got over there, she was dancing up and down on the unit. listen to her. >> i ran over there hoping that i would make it before she fell. hoping that she did not jump. when i got there she was still up there, and i'm just looking and praying. if she does fall, or jumps, let me catch her. reporter: he did catch her and she did fall. right there, she is dancing up and down on it, and you see his arms up and boom. he catches her. he drops her a little bit down, but caught the entire week before she hit the ground. he tore his shoulder and she had

no injuries at all. >> i picked her up and i was holding her in tears came into my eyes. >> he is the real hero and will he save the life. we are so grateful for that. reporter: can you imagine catching a girl 25 feet up? you saw the swing around his shoulder. he did get an injury. she did not. the little girl apparently is a special needs child. her parents were not be charged in this case. megyn: where were the parents during all of this? reporter: the parents say they were in the other room and a letter in her room and she called out of that accordion stuff that surrounds the air-conditioning unit are they had no idea until they actually went outside and found out. megyn: good for him. wow. ain't you, sir. mr. saint bernard, good for you. coming up, "kelly's court" takes

up the mysterious death of a six-year-old boy and a few days later, his father's girlfriend. remember this from last year? this little boy was the son of a wealthy pharmaceutical executive. they said that he fell down a flight of stairs and later died. just a couple days later, the father's girlfriend was found hanging from a balcony in the very same home. the boy's death was ruled an accident and the girlfriend's death was ruled a suicide, but now the little boy's mother is demanding a new investigation and the family of the girlfriend also wants a new look. we will take a look at the evidence in today's "kelly's court." and also our focus group takes on the president's comments about small business owners and what he says is the driving force behind success in america. in reaction to a battery charge from rush limbaugh. >> i think it can now be said without equivocation -- which

without equivocation, that this man hates the country and rock obama is trying to dismantle brick by brick the american dream. there is no other way to put this in no other way to explain it. [ man ] excuse me miss. [ gasps ] this fiber one 90 calorie brownie has all the moist, chewy, deliciousness you desire. mmmm. thanks. [ man ] at 90 calories, the brownie of your dreams is now deliciously real. [ female announcer ] and now, try our new chocolate chip cookie 90 calorie brownie.

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if you've got a business, you didn't build that, somebody else made that happen. the internet didn't get invented on its own. government research created the internet so that all the companies could make money off the internet. megyn: well, the fallout from those remarks has grown over the last four days into a tidal wave of angry responses from business other thans nationwide. resentful of the assertion that it wasn't just hard work and ingenuity that built this country, but government in large part. many commentators calling this a pivotal moment of this campaign, a potential gaffe that defines, they believe, the obama administration and what it stands for. here's the takeaway from our senior political analyst, brit hume. >> it is fair to say that we know more tonight than we ever have about the president's view of business and the economy. his assertion over the weekend that, quote: if you've got a business, you didn't build that, somebody else made that happen, explains nearly everything.

he wasn't talking about god, he was talking about government. here is a man who believes not just that the government-provided aprilwork of roads, bridges and law enforcement helps the private sector, he believes these things are the nerve center, the driving force, more important than any individual talent, enterprise or initiative. megyn: our focus group is back. representatives today of both republicans and democrats to react. welcome, all. so this this has taken off in a meaningful way online and in papers and so on. kevin mccullough, is it as big a deal, as brit hume and others seem to believe it is? >> absolutely, it is. i'm a small business owner. medicare, obamacare, other things have already weighed on us for the last three years. but then to come to us when we hire three out of every four new workers in the country and to say that we're not putting in the sleepless nights, we're not putting in the blood, sweat and tears to build our business is just an insult, and it's an

insult to the number one job-creating sector in america. this cannot be allowed to go unnoticed. megyn: but this is what president obama -- >> not he himself, but others on the left, elizabeth warren, what he was trying to say was socials not just ingenuity and drive -- >> of course that's true. but it's also true that small business pays an awful lot more taxes than most americans to build that infrastructure. of it's not like it was created and the government didn't send you a bill. half of americans don't pay income taxes. small business pays income taxes, payroll taxes, health care taxes, it helps build an infrastructure, and of course it benefits from it, but it paid for it. megyn: i think the part where he got in trouble, the whole thing is controversial, but the most controversial part was you didn't build that. >> well, you know, that's a problem for small business owners who take offense.

but let's diagram that sentence. i appreciate you playing the whole clip because if you actually look at the context of what the president said, he was saying you didn't build those roads, those bridges, and i think that's obvious to anyone who's started a small business. they know that, you know, the schools that educated their workers, the roads that help get their products to market, these are public investments. and the reason we're having this conversation is because right now the wealthiest of the wealthiest of business other thans are paying less taxes than their workers in the middle class. megyn: want to go to a special guest, he's the coo of the chamber of commerce. he's got some strong thoughts. >> absolutely. first of all, we have the most progressive tax system in the world right now, so to say that business owners aren't paying their fair share is just flat wrong. and secondly, you know, this is just one of several statements. you referred to elizabeth warren's statement. valerie jarrett made a similar statement a few months ago, it's

a view that evokes a kind of resentment against people out there building the economy, hiring people, creating jobs, propelling us forward. so, you know, i get why these small business owners are offended by this statement. megyn: now, david's not the only one who feels this way. it's a very short clip, but here's how charles krauthammer put it in part on "special report." listen to him. >> spoken by a man who never created or ran so much as a candy store. megyn: so that is a criticism we've seen of president obama many times, he never ran a business. michelle malkin came out last week and said the difference between mr. obama and mr. romney is one is used to signing the back of paychecks, and one is used to signing the front of paychecks. if you've never run a small business, is it a disadvantage? john? >> well, we see mitt romney's experience. he's run a small business, or he's run several businesses, but he's also run a state, massachusetts. and he was 47th out of 50 in job creation. i think all this outrage is just an attempt to distract from

romney's lousy record. we talk about progressive taxes, well -- >> that's not my purpose. >> well, no, but he pays 13.9%. >> distraction from the romney record? >> if you want to defend your small business, don't elect mitt romney. oh, come on, all this faux outrage. megyn: i talked to charles payne yesterday, and he talked about how he had relationship damage, marriage issues and so on because he put so much time into his business. and he felt as kevin feels, that he was dissed, he was dismissed by that -- >> i empathize, but the reality is what he was talking about was roads, bridges, infrastructure. i think that's patently obvious -- megyn: you disagree. doc knox. >> the irony of this actual comment is that if you do actually pay the full clip and watch it in full context, it's much worse than just the little clip that we heard. the reality is this reveals a world view of this president that all good emanates from

government, not the individual, not the private sector, which is a very dangerous place to be, i think, in this political climate. because you need the private sector, those small business owners to pull us out of this mess in the first place. what he's doing is not playing smart politics, and i've heard smart democrats say this was a mistake by the president, he should stay away from this type of rhetoric because it goes at the heart of the american economy -- megyn: here's what i want to ask. go ahead, john. >> one leader told me, oh, here we are again. i guess it takes only a village to build a business. megyn: the reason the president made these remarks is he wants to justify his call for higher taxes on wealthier americans. and, you know, yesterday i referred to it as sort of the guilt trip you get from your grandma. you owe. you didn't get there by yourself. you have to pay it forward. but how is it what he's doing a justification for more taxes to say to the small business owners, you know, it took roads, and it took a good teacher, i mean, we all have that.

i mean, every american has driven on roads, every would-be small business owner had good teachers. some fail and some succeed. so how is it a justification for higher taxes? >> it's a justification because the bottom line is that they're not paying their fair share. it's n that you're calling on them to pay more, that they earned so much money because of what all of us have given to them. if there are no roads f there are no public schools, i was educated in a public school. and so all of these things are put into place so that people can succeed. context is everything, and that's what's the most important thing about this remark is that view inside total, i disagree with tony that it's worse. it's actually much better and much fuller in full context because success doesn't happen in a vacuum. it doesn't happen alone. megyn: okay. >> this is the problem, it's us against them. >> no, it's we, it's collective. >> hostility toward individual rights, individual achievement and property rights -- [inaudible conversations]

>> talk about individual rights because the reality is if you're rich enough in this country k you can actually renounce your citizenship, go abroad and -- [inaudible] [inaudible conversations] >> that's not the people who president obama was inferring to. >> i think it was an unfortunate gaffe. >> thank you. megyn: democrat saying this. >> it was an unfortunate flub. there are going to be others that he's going to create. there are going to be others that romney's going to create. but the reality is that if we spend so much time talking about these so--called job creators and what we're doing for job creators, they have not created jobs in years. and what the president is talking about -- [inaudible conversations] megyn:ing i want to get to this point -- [inaudible conversations] i want to get to this point, too, because now some on the right, you know, the far right, are talking about how they view this as evidence of president obama's world view i, a view of america. as a country and we'll go to, you know, rush limbaugh who takes the most extreme view on

this. but part of what he says that i want to ask you about in particular. listen to how rush reacted. >> i'll tell you what, i think it, i think it can now be said without equivocation, withouteqs country. he is trying, barack obama is trying to dismantle brick by brick the american dream. there's no other way to put this! there's no other way to explain this. megyn: to dismantle the american dream is the part that was interesting. [inaudible conversations] >> i flatly disagree with that assertion. but it is important to say that it's not just a gaffe. this is a consistent line of communication from the administration for at least a year or more. megyn: what is? >> this assertion that business owes more to the government. you know, most of my members see government getting in the way of their success, not owing --

megyn: i want to get to jehmu greene. >> well, i disagree with john fund that it actually does take a village to build an economy and a business. i think president obama was pretty clear in saying that the pain and the passion that small business owners put in, he gave them credit. but just to completely dismiss the contribution that government makes is a bit laughable. everyone, we've talked about the roads and the bridges, but can we talk about eminent domain and how it has benefited so many very wealthy individuals and companies? the government does that. copyright, patents, trademarks, these are all things that the government does to help support business. megyn: go ahead, john. >> as i said before, of course, infrastructure helps, but we all pay taxes for that. secondly, we have just heard that there are $2 trillion sitting on the sidelines, supposedly job creators aren't using that to create jobs. the reason they're not doing that, and you talk to democratic businessmen and republican businessmen, they'll say the same thing. it's because of economic uncertainty.

this administration has increased the level of economic uncertainty. the largest tax increase in america is about to start december 31st -- megyn: i want to answer one question before we go. let me put this to you, basil. it's in the news today that barack obama is now moving away from his use of the teleprompter, that he's now going off note cards, and they thought it would give him, you know, be more humanistic. >> more candid. megyn: do you think this was, possibly, a result of that? you go off script? >> it's possible. didn't really look like he was on a teleprompter at that point. it just could be a very unfortunate gaffe. >> but taken out of context. [inaudible conversations] >> anybody wants to complain about job creators in this economy, i say the same thing: go out, start your own business and hire people. [inaudible conversations] [laughter] >> if anyone would like to go start a business in pakistan,

you're welcome to do it. but if you start a business here, you do well by america, then you do well for america. megyn: we've got to go. great job. thank you. always love those focus groups. we're taking your thoughts on it, and the topic that we debated. follow me on twitter,@megyn kelly. >> a garying mother speaking -- grieving mother speaking out about the death of her 6-year-old boy, the mysterious death of his father's girlfriend days later, and now the girlfriend's family is questioning the medical examiner's conclusion that she died by suicide. we'll talk about it next in kelly's court. >> loved him more than anything in all the universes. i told him every day. i told him i was the luckiest mommy that ever lived.

megyn: kelly's circuit court back in session. on the docket today, major

developments in the coronado mansion mystery. the mother of this little boy, 6-year-old max shacknai, is speaking out really for the first time one year after her little son fell down a flight of stairs in his father's home. they were divorced. and died. max's death was ruled a, quote, horrible accident. but two days later the father's girlfriend who was watching little max at the time of his death hangs herself. so two days later she hangs herself in the same mansion. both tragedies took place here. it's on coronado island which is near san diego, and now a year later little max's mother, dena, is saying the police have botched this case. she wants it reopened, she's hired new investigators and believes the whole truth is not being told. listen to the lawyer. >> based on our experts and their findings, we are confident that the scenario put forth is inaccurate on how max's injuries

occurred. >> it is still my job as a mother to find out what happened exactly to him and to continue that until i find an answer. megyn: joey jackson is a former prosecutor, now defense attorney, and mercedes cohen. all right, panel, so she doesn't believe the police came to the right conclusion. let's just show our viewers the diagram put out by, i think, the sheriff's office, about how they believe the accident -- their conclusion -- happened with little max. that he was coming on the second floor, that he went over the railing, sort of the, you know, the downstairs railing, fell over, hit the other staircase railing and fell to the ground. joey, um, they say it was an accident, and yet there's a question now because the mother says her son was not a daredevil; he wouldn't have fallen down the stairs, and she believes this woman who was watching him had a criminal background. >> sure. you know, it's a very tough case to talk about because we're

talking about a grieving family, and the mother has every right in the universe to find out and to get closure of exactly what happened to her child that day. and i know mercedes will speak to the mother and the mother's defense is here, or in her defense. but ultimately, you know, this was investigated and, certainly, it would be probable and perhaps even likely that the accident occurred in the way that the diagram depicted. there were spinal injuries here, there were fable bones that -- facial bones that, unfortunately, were broken. and as a result of that and spending four days in the hospital or more, he died. and it's tragic, and apparently there's new evidence, megyn, as we know or we think we know based on that press conference that they want to share with the police to, perhaps, get to the final answers of this equation and really end the matter in terms of how the death occurred. megyn: mercedes, very suspicious even without this alleged new evidence that the caregiver of the boy hangs herself two days late. >> exactly right. and what's really strange is that the girlfriend's family got

a forensic pathologist -- megyn: this was before she hanged herself -- and he said, wait a minute, this is not consistent with a suicide. there's no mental health history, this is a woman who was absolutely fine. and when he did the autopsy of the girlfriend, he found that there was no cervical fracture which would be consistent with a hanging. so he said the neck is not broken, and there was a blunt trauma to the back of the head -- megyn: who said this? >> this is the forensic pathologist who was hired by the family and went on the networks and said this is not a suicide, folks. i think this is an intruder or someone else that actually murdered her. megyn: is there a question, joey, about possibly another figure who may have done harm to this boy and then done harm to the only other person who was in the house at the time the boy died? >> you know, there really is. but the bottom line is that this has been a mystery, megyn, as we know, since it occurred a year ago. and you have to in light of that

really look and analyze what occurred here, and both families have a voice here. they're saying, of course, when it relates to max that this didn't happen. perhaps, we don't know the girlfriend was involved. and then, of course, you have the girlfriend's family suggesting that this was not a suicide, something else was amiss which would point to your question, megyn -- megyn: i've got to stand you by. hard break. we're going to continue this on the opposite side, don't go away. a party? [ music plays, record skips ] hi, i'm new ensure clear. clear, huh? my nutritional standards are high. i'm not juice or fancy water, i'm different. i've got nine grams of protein.

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megyn:ing so there are still more questions than answers in this case, mercedes. apparently, with respect to the girlfriend's death her family wants the case reopened, too, because they don't believe she committed suicide. her hands were tied behind her back, her feet were bound -- her hands were tied behind her back -- and they say a message in black paint appeared in a bedroom near where she was found hanging that read: she saved him, can you save her?

they say that also a t-shirt was wrapped around her neck and had been partially stuffed in her mouth. you're telling me the police concluded this was a suicide? >> that's what's so absurd. that's why the family was in complete awe because who hangs themselves like this? they said, first of all, she was naked. he goes, i have in all the years of my forensic pathology, i have seen just a handful of individuals like this. how can they possibly conclude with the binding, the gagging and the way that she was bound, the blunt trauma to the back of her head and then, of course, that the neck wasn't broken? how could you possibly say she hung herself? >> it's a fair point. megyn: and it was the medical examiner who concluded it. sometimes professionals make mistakes. >> oh, they do. and as a result of that -- and this is why dr. shacknai, the mother, dena, she hired a team of investigators to go and do their own investigation. now, the police department has said they welcome a meeting to see what the findings of that investigation are. we also know, megyn, that there is some focus by the family,

dr. shacknai, on the girlfriend. they're referencing a potential criminal record she might have had -- megyn: do we know what that was allegedly for? we haven't confirmed that. >> yes. it was allegedly for a petty larceny that was never disclosed, and there was also an indication by dr. shacknai that rebecca did not give her the indication of her correct name. so there's a real focus on her, and there's also with what the lawyer talked about is a law that is missing, and they want to talk about legislation that would be enacted that would say, listen f there are parents that are spending time, parents who are divorced and the child is spending time in both places, then each parent should know the background -- >> that's one of the things his mother's so upset about. she claims she had an agreement with the husband nod to let the the -- not to let the girlfriend baby sit the child alone. it's such a problem when the girlfriend or boyfriend of an ex-spouse has access to hair

children. joey, mercedes, good debate. stay with me, we'll be right back.

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